Records Retention Schedule for Businesses

It is important to hold onto your business records in case of an IRS audit or other examination. Retaining unnecessary records will soon exceed storage space available for most businesses. Therefore, you may wish to establish a retention schedule that takes into account state and federal regulations, as well as industry standards. The retention periods are intended as a general guideline only. If you have questions about destroying any tax or accounting records, please contact a Somerville & Company, P.L.L.C. professional immediately at (304) 525-0301.

Record retention schedule guide for businesses

Accounting Records
Document	Retention period
Accounts payable	7 yrs
Accounts receivable	7 yrs
Audit Reports	Permanently
Cash books	Permanently
Chart of accounts	Permanently
Correspondence (legal and tax related)	Permanently
Correspondence, general	2 yrs
Depreciate schedules	Permanently
Expense records	7 yrs
Financial statements (annual)	Permanently
Fixed asset purchases	Permanently
General Ledger	Permanently
Internal audit reports (miscellaneous)	3 yrs
Inventory records	Permanently
Invoices to customers or from vendors	7 yrs
Loan payment schedules	7 yrs
Payroll records and summaries	7 yrs
Petty cash vouchers	3 yrs
Physical inventory tags	3 yrs
Plant cost ledgers	7 yrs
Purchase orders (1 copy)	7 yrs
Receiving sheets	1 yr
Sales records	7 yrs
Subsidiary ledgers	7 yrs
Tax returns, revenue agents' reports and other documents relating to determination of income tax liability	Permanently
Trial Balances (monthly)	5 yrs
Bank Records
Document	Retention period
Bank reconciliations	2 yrs
Bank statements	7 yrs
Canceled checks	7 yrs
Deposit slips	5 yrs
Electronic payment records	7 yrs
Corporate Records
Document	Retention period
Board minutes	Permanently
Business licenses	Permanently
Bylaws	Permanently
Contracts – major	Permanently
Contracts – minor	Life + 4 yrs
Insurance policies	Life + 3 yrs
Insurance records, accident reports, claims, policies, etc.	Permanently
Leases / mortgages	Permanently
Patents / trademarks	Permanently
Shareholder records	Permanently
Stock registers	Permanently
Stock transactions	Permanently
Trade mark registrations	Permanently
Employee Records
Document	Retention period
Benefit plans	Permanently
Employee files (ex-employees)	7 yrs
Employment applications	3 yrs
Employment taxes	7 yrs
Expense reports	7 yrs
Payroll records, summaries and tax returns	7 yrs
Pension / profit sharing plans	Permanently
Safety records	6 yrs
Time cards and daily reports	7 yrs
Real Property Records
Document	Retention period
Appraisals by outside appraisers	Permanently
Construction records	Permanently
Lease payment records	Life + 4 yrs
Leasehold improvements	Permanently
Real estate purchase 1. Permanent for LIFO system 2. Permanent for real estate purchase 3. Check with your agent. Liability for prior years may vary 4. Or statute of limitations for employee lawsuits	Permanently

Note: Guidelines for maintaining records are based on a taxing authority's statutory power and limitations on auditing these records.